On June 7, 2017, Judge Birss of the United Kingdom High Court of Justice (the Court) enforced its injunction against Huawei. Initially, the Court imposed the injunction because it ruled that Huawei did not seek a license for Unwired Planet’s standard essential patents under fair, reasonable, and non-discriminatory (FRAND) terms. The ruling at bar is an outgrowth of Judge Birss’s 163-page opinion describing Huawei’s violations in extraordinary detail.

In the instant action, Huawei attempted to proffer a counteroffer to the Court to avoid the aforementioned injunction. However, Judge Birss rejected the counteroffer on the grounds that time for negotiations had passed, writing, “[t]he undertaking offered by Huawei now is too late. By refusing to offer an unqualified undertaking before trial and before judgment Huawei forced Unwired Planet to come to court and vindicate its rights…The right thing to do now is grant a FRAND injunction albeit one which will be stayed on terms pending appeal.”

Moreover, the Court subjected Huawei to a set of licensing terms to use with Unwired Planet that Judge Birss felt was based on FRAND terms (dubbing it the “Settled Licence”), which it annexed to this latest opinion. The arrangement forces Huawei to seek a license with Unwired Planet, after which the Court obligates Unwired Planet to grant access to the patents. The Settled Licence also forces Unwired Planet to release Huawei from all infringement claims for activities transpiring between January, 1, 2013, and June 7, 2017. It also itemizes the payment scheme for every device and equipment. Judge Birss has taken an unusually transparent approach to this case, presumably to provide insight into what he interprets as a license adhering to FRAND principles.

In short, the Court came to five distinct conclusions:

  1. An injunction was placed against Huawei because the company did not seek a license with Unwired Planet under FRAND terms;
  2. The Settled Licence represents a valid license under FRAND terms for these parties;
  3. Huawei must pay a portion of Unwired Planet’s costs of the non-technical trial for proceedings issues related to Samsung and the issue related to lack of FRAND rates;
  4. Huawei has permission to appeal on three issues:
    1. whether Settled Licence is a global license;
    2. whether the judgment was right to require a distortion of competition under a “hard edged non-discrimination” theory; and
    3. the findings of Huawei v ZTE (Article 102 TFEU),regarding the judge’s findings on abuse of dominance and injunctive relief; and
  5.  Unwired Planet can appeal the decision depending on whether the Court’s ruling stretched too far regarding the global benchmark issue.[1]

Currently, the injunction is to be stayed pending the result of the appeal—in the meantime, it will set terms that provide for appropriate royalty payments from Huawei to Unwired Planet. This case has serious implications for how European Union courts interpret FRAND terms, and remains an issue stakeholders should closely monitor moving forward.

For additional information, please click here.

###

[1] “At one stage it did seem to be suggested by Huawei that this approach showed that Huawei had won the FRAND rate issue because these calculations showed that it had achieved a lower effective global benchmark rate than rates it was actually offering Unwired Planet in these proceedings.” See Judgement para. 52.